When asked why he robbed banks, the notorious bank robber Willie
Sutton is said to have replied, "Because that's where the money is."
This quote - whether Sutton actually said it or not - has become a
part of American folk wisdom, a reminder that we should not overlook
the obvious when approaching any problem.

Like Sutton, most organized crime figures sell drugs, commit
securities and bank fraud, traffick in human beings, murder and
extort because that's where the money is. But once acquired, money
that is the result of illegal activity must somehow enter the
legitimate financial system to be useful to the criminal. This fact
makes the cash that is organized crime's greatest objective also one
of its greatest vulnerabilities.

Consider the average drug trafficking organization. If it
wishes to sell $1 million worth of heroin it must produce, transport
and distribute merely 22 pounds of heroin to do so. Having sold the
drugs, however, the trafficking organization must contend with 256
pounds of street cash. That's 10 times the weight of the drugs sold.
For major drug trafficking organizations this effect is of course
multiplied. Drug dealers that sell $1 billion worth of cocaine must
contend with 256,000 pounds of illicit currency. And although no
definitive figures are available, if we assume a conservative figure
of $50 billion worth of illicit drugs sold in the United States each
year, the amount of "dirty" currency produced by these sales weighs
almost 13 million pounds. This represents a tremendous burden for
organized crime - and a tremendous opportunity for law enforcement.

The process by which criminals conceal or disguise all their
weighty ill-gotten gains is, of course, money laundering. As a
criminal enterprise, money laundering often is not taken as seriously
as it should be. Many are inclined to view it as a harmless,
victimless game played by unscrupulous accountants and white collar
criminals. But nothing could be further from the truth. Money
laundering constitutes a serious threat to our communities, to the
integrity of our financial institutions and to our national security.
For behind every dollar of dirty money in need of laundering is a
trail of victims - victims of violent crimes committed to settle drug
wars; victims of terrorism; women and children trafficked into
dangerous, degrading labor; and honest businessmen and women driven
to bankruptcy by front operations for organized crime.

Money laundering is the final stage of organized criminal
activity, and sadly, it is an enormous problem. One recent estimate
put worldwide money laundering activity at roughly $1 trillion a
year, almost half of it attributable to the proceeds from drug
trafficking. A former IMF official estimated that money laundering
accounts for two to five percent of the world's gross domestic
product.

In the 1970s the United States was among the first nations to
recognize the threat of money laundering. The laws we passed to
combat the practice - requiring banks and other financial
institutions to report to the Internal Revenue Service any cash
transactions over $10,000, for example - have done their job. Now
that they are denied direct access to U.S. financial institutions,
criminals have had to find other ways to launder their profits.
Criminals in the United States have been forced to send their
proceeds overseas, often through a complex series of transactions
involving shell corporations and off-share banks operating in
countries with lax financial laws. Criminals outside the U.S. have
resorted to indirect methods of placing their profits in the United
States by using dollar-denominated accounts in foreign banks that are
in turn deposited in U.S. financial institutions in the foreign
bank's name.

And criminals engaged in all-cash operations. Principally drug
dealers, but others as well - are reacting to U.S. currency reporting
laws by keeping their profits out of the banking system altogether.
They employ an army of couriers to physically transport huge volumes
of currency out of the country. These couriers travel over the
highways or through the airports with loads of cash -- often stuffed
in boxes, suitcases and concealed compartments in vehicles. Such
bulk cash smuggling, in fact, may be the most common form of money
laundering today.

More than many areas of law enforcement, successfully combating
money laundering takes the coordinated effort of the federal
government, foreign governments, state and local law enforcement,
banks and other financial institutions. State and local
investigators must have the training and the resources they need to
recognize and investigate suspected laundering operations.

The Department of Justice is committed to helping you use our
money laundering laws to the fullest extent possible to identify,
investigate and prosecute those who would launder the illegal
proceeds of organized crime by giving law enforcement to tools to
follow the trail. The United States Congress has shown leadership in
attacking organized crime by following the trail of dirty money it
leaves behind. But our money laundering laws have not changed
significantly since they were enacted. The time has come for
Congress to lead once again.

The Department of Justice has identified several areas in which
our money laundering laws need to be updated to more effectively
combat organized crime and to better serve the cause of justice.

The first of these areas is bulk cash smuggling. Hundreds of
millions in U.S. currency is transported out of the United States
each year in shipments of bulk cash. The only law enforcement weapon
currently available to combat this activity is a requirement that
shipments of more than $10,000 in cash be accompanied by a report to
the United States Customs Service. Complicating matters further, the
Supreme Court has ruled that the failure to file such a report is not
a serious enough offense to warrant the confiscation of bulk cash
when it is discovered - even if the smuggler took elaborate steps to
conceal the currency. The result is that the effective penalty for
smuggling dirty cash out of the country is a relatively short prison
sentence for the courier - a virtually meaningless penalty for a drug
trafficking organization or a money laundering ring.

A Customs Agent in Puerto Rico, for instance, recently stopped
a passenger waiting to board a flight to the Dominican Republic with
$139,000 stuffed in his socks. For not filing the Customs report, the
smuggler was sentenced to 12 months in jail. Now, it's safe to assume
that whomever the courier worked for was able to replace him almost
immediately. Confiscating the cash the courier carried, however,
would have been a significant blow to his employer. But the court
ruled that the Customs Service could not seize the cash unless it
could prove the money was acquired through criminal activity.

The existing laws against bulk cash smuggling are wholly
inadequate. The Department of Justice is currently considering
recommending that Congress act to make bulk cash smuggling a crime
and to provide for the confiscation of the smuggled property. It
stands to reason that if smuggling diamonds or firearms is a crime
serious enough to justify seizure of the smuggled goods - whether or
not it can be shown that the courier was involved in another crime -
smuggling illicit cash should be a crime as well. This is a common
sense reform of our money laundering laws that I hope Congress will
consider seriously and adopt.

Of course, the same couriers who attempt to smuggle cash out of
the country have to transport the cash to the border or to the
airport. This is yet another opportunity for law enforcement to
crack down on organized crime with the appropriate adjustment of our
money laundering laws.

A police officer, for example, recently stopped three men in a
car traveling on Interstate 295 in Delaware. One of the men had a
prior conviction for drug trafficking; another had two prior
convictions for drugs and a pending murder charge. In the trunk of
the car was $10,000 in cash, wrapped in rubber bands and two layers
of plastic and stuffed inside a duffle bag. A drug sniffing dog hit
on the currency and an Ion scan machine detected cocaine on the
bills.

The officer seized the currency as drug money. But just last
month a federal court threw out the case. The reason is the same as
in the bulk cash smuggling case. It's currently not a crime to
transport drug money down the highway. It's a crime to put drug
money in the bank, or to electronically wire it to Brazil. It's even
a crime to use drug money to buy a Persian rug. But it is not
illegal to transport it on our roads or through our airports.

Congress should close this loophole in our money laundering
laws. The Department of Justice is considering asking Congress make
it a federal offense for a person to transport more than $10,000 in
cash proceeds of a criminal offense in interstate commerce -- that
is, on a public highway, on an airplane or on any other common
carrier. This offense would occur if the person knows that the money
is the result of criminal activity, or if he or she knows it is
intended to be used for a criminal purpose.

The third area in which change is needed in our money laundering
laws is the list of crimes committed in other countries that allow
prosecution by U.S. officials when their proceeds are brought to the
United States.

Our money laundering laws make it a crime for foreign drug
dealers, terrorists or those who have committed bank fraud to send
their profits to the United States. But the great majority of other
foreign crimes - crimes that routinely generate money that criminals
need to hide or invest somewhere else - are not on the list. The
result is that U.S. prosecutors are routinely forced to turn down
cases involving money sent into the United States by corrupt foreign
public officials, swindlers and organized crime groups.

This gaping hole in U.S. law makes it extraordinarily difficult
for federal law enforcement to keep the proceeds of foreign crimes
out of U.S. financial institutions. One solution might be to amend
the money laundering statute so that foreign criminals -- whether
working with each other or with criminals in the United States -- are
placed on an equal footing with domestic criminals. Laundering the
proceeds of any serious crime should be a criminal offense in the
United States, regardless of where the underlying crime was
committed.

These are a few of the changes that in the coming weeks and
months the Department of Justice plans to ask Congress to make in our
money laundering laws. Other areas we are considering very closely
as well include the wire transfer of tainted money, laundering the
proceeds of terrorism and denying U.S. visas to suspected foreign
money launderers and their families. With these changes in the law,
we hope to enhance the ability of federal, state and local law
enforcement to work with banks and private businesses to identify,
investigate and prosecute money launderers - and it so doing help
take the profits out of organized crime.

It has often been said that it took an accountant to bring Al
Capone to justice - and for good reason. Legend has it that the term
"money laundering" originated from Capone's use of a string of
coin-operated launderettes here in Chicago to disguise his revenues
from gambling, prostitution and protection rackets. And in the end,
Capone was convicted of tax evasion, not any of the underlying crimes
he had committed.

Investigating and prosecuting money laundering can be a long,
arduous and complex process. But it is critical to bear in mind that
it is more than a bloodless exercise in accounting. When we fight
money laundering we fight organized crime. When we fight money
laundering we keep drugs out of our playgrounds and away from our
kids. We keep weapons out of the hands of terrorists. We protect
small businesses. And we safeguard the human dignity of women and
children trafficked into forced labor and prostitution.

When we stop criminals from enjoying the fruits of their
illicit activity, we serve the cause of freedom and justice. For law
enforcement, there is no higher calling. And for the citizens we
serve, there is no greater cause.